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October 26, 2016 at 12:47 PM
Morgan Stanley (MS) says its 15,850 advisors will be giving their clients the option of having fee- or commission-based retirement accounts in 2017, after the new Department of Labor fiduciary rule goes into effect.
The official announcement comes one week after CEO James Gorman alluded to this decision during a call with equity analysts. “But I think it’s fair to say our firm view is that optimizing choice for our clients, giving them the choice of how they deal with the firm, services to access, how they pay for those services, is critical to how we operate as a firm,” he explained.
The wirehouse said in a press release that clients who “prefer transaction-based pricing will continue to have access to retirement brokerage accounts and receive advice that complies with the DOL fiduciary rule and Best Interest Contract Exemption (BICE).”
At the same time, investors who would rather have fee-based retirement accounts “will continue to have access to the firm’s world-class investment advisory offerings.” Morgan Stanley says it has some $850 billion in retirement and non-retirement assets held in fee-based accounts.
“Client needs vary by their individual situations, and they tell us they want choice in how they pay for services. We believe our advisors can most effectively uphold a fiduciary standard of care and work in clients’ best interests by continuing to offer choice,” explained Shelley O’Connor and Andy Saperstein, co-heads of wealth management, in a statement.
Merrill’s Approach
This dual strategy to the DOL rule stands in marked contrast to the Bank of America-Merrill Lynch (BAC) move to abandon commission-based retirement accounts in April 2017, which it announced earlier this month.
